Why it’s worth checking the payslip: Low Pay Commission Report

Understanding Society has been used as a comparative resource as part of The Low Pay Commission’s annual report to government on the National Minimum Wage (NMW).

The Low Pay Commission, established for 17 years, undertook an in-depth review into the ‘reliability and usefulness’ of several official data sources when assessing the impact of the minimum wage.

By using BHPS/Understanding Society used as a comparative data source alongside surveys such as the Annual Survey of Hours and Earnings (ASHE), and the Labour Force Survey (LFS), the Commission was able to understand the prevalence of rounding and measurement error when stating pay information.

The report said:

“The BHPS/Understanding Society data supported the view that measurement error of pay from household data was largely random. The most important finding was that there was firm evidence in the value of checking whether respondents’ answers were ‘exact’ (taken from pay slips).”

Additionally, using the BHPS/Understanding Society, and the Family Resources Survey, the research attempted to identify any effects from the National Minimum Wage (NMW). They found that:

Indebtedness and deprivation were worse for NMW households than for other working households, although the situation was even worse for non-working households.

The ability to heat ones home and save regularly appreciably worsened over the years of recession

Savings declined by about 20 per cent for NMW individuals between 1999 and 2010 (the decline for non-working households was even greater, at 40-50 per cent)

There was evidence that the financial situation disadvantage of NMW households improved between 1998 and 2003 before re-emerging at the onset of Recession.